Addis Ababa Science and Technology University
College of Social Science and Humanities
Department of Business Management
Course Syllabus
Course Title: Introduction to Economics
Course code: Econ 2009
Credit Hrs. : 3
Course Instructor: Aklilu Amiga (PhD), email: aklilu.amiga@aastu.edu.et ; Tel. +251-0911-634-534
Consultation Hrs.: Mondays and Fridays from 10:30 AM to 12:30 PM
Office: Block 80 Room # 113/207
Course Description
Econ 2009, Introduction to Economics, is an introductory survey course covering basic principles and
issues of economics. An overarching aim of the course is to introduce Economics as a key strand of the
social sciences and, in so doing, to develop a critical understanding of the assumptions underpinning
Economics. Broadly speaking the course has two components, microeconomics and macroeconomics. In
microeconomics, the focus will be on the way in which individual economic agents – workers,
consumers, households and firms – make decisions. This part begins with a discussions and applications
of the concepts of demand & supply; theory of the consumer; theory of producer; and market structures.
While in macroeconomics, the study involves the study of the economy as a whole, especially issues
related to total output, interest rates, unemployment, inflation, and growth. Throughout the discussions,
this course will attempt to combine economic theory with practical, everyday applications.
Course Objectives
Upon completion of this course, students will be able to demonstrate an exposure to the basic elements of
microeconomics as well as macroeconomics. Specifically:
To acquaint students with the basic principles of economics and economic way of thinking.
To familiarize students with the basic theory of consumer and producers decision making.
To provide students with the concepts of economic models and model constructions.
To conceptualize students the various market structures.
To equip students with the basic concepts of macroeconomic theories.
Course outcomes
At the end of the course students will be able to:
understand basic economic assumptions, theories and reasoning;
describe, explain and apply graphically, mathematically and in words, the underlying
microeconomic and macroeconomic theories applicable to hypothetical and real case studies;
analyze and solve problems using the concepts and diagrams ;
acquire a working knowledge of the nature and role of markets in the economy; and
use economic reasoning to assess individual and public choices concerning scarce resources.
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Course Content
Chapter 0ne: Introduction
1.1 Definition and Meaning of Economics
1.2 Scope of economics
1.3 Methods of economic analysis
1.3.1 Methods of Economic analysis-Positive and normative economics
1.3.2 Inductive and deductive reasoning in economics.
1.4 Scarcity, choice, opportunity cost and production possibilities frontier
1.5 Basic economic questions
1.6 Economic systems
1.7 Decision making units and the circular flow model
Chapter Two: Demand, Supply and Market Equilibrium
2.1. Demand
2.1.1. Definition and basic concepts of demand
2.1.2. The law of demand and basic determinants of demand
2.1.3. Demand function, schedule and curve
2.2. Supply
2.2.1. Definition and basic concepts of supply
2.2.2. The law of supply and basic determinants of supply
2.2.3. Supply function, schedule and curve
2.3. Market equilibrium
2.3.1. Market equilibrium and its shifts
2.3.2. Effects of shift in demand and supply on equilibrium
2.3.3. Effects of fixing prices
2.4. Elasticity
2.4.1. Price, income, and cross-price elasticity of demand
2.4.2. Price elasticity of supply
Chapter Three: Consumer Behavior
3.1 Consumer preferences
3.2 The concept of utility
3.3 Approaches of measuring Utility
3.3.1 The cardinal utility approach
3.3.1.1 Assumptions of cardinal utility theory
3.3.1.2 Total and marginal utility
3.3.1.3 Law of diminishing marginal utility (LDMU)
3.3.1.4 Equilibrium of the consumer
3.3.2 The ordinal utility approach
3.3.2.1 Assumptions of ordinal utility approach
3.3.2.2 Indifference curve and map
3.3.2.3 Properties of indifference curves
3.3.2.4 The marginal rate of substitution (MRS)
3.3.2.5 The budget line or the price line
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3.3.2.6 Equilibrium of the consumer
Chapter Four: Theory of Production and Costs
4.1 Theory of production in the short run
4.1.1 Definition of production
4.1.2 Production function
4.1.3 Total, average, marginal product
4.1.4 The law of variable proportions
4.1.5 Stages of production
4.2 Theory of costs in the short run
4.2.1 Definition and types of costs
4.2.2 Total, average, marginal costs in the short run
4.3 Relationship between short-run production and cost curves
Chapter Five : Market structures
5.1 The concept of market in physical and digital space
5.2 Perfectly Competitive market
5.2.1 Assumptions
5.2.2 Short run equilibrium of the firm
5.2.3 Short run equilibrium of the industry
5.3 Monopoly market
5.3.1 Definition and Characteristics
5.3.2 Sources of Monopoly
5.4 Monopolistically competitive market
5.4.1 Definition and characteristics
5.5 Oligopolistic market
5.5.1 Definition and characteristics
Chapter Six: Fundamentals of macroeconomics
6.1 Goals of Macroeconomics
6.2 The National Income Accounting
6.2.1 Approaches to measure national income (GDP)
6.2.2 Other income accounts (GNP, NNP, NI, PI and DI)
6.3 Nominal versus Real GDP
6.4 The GDP deflator and the Consumer Price Index(CPI)
6.5 Macroeconomic Problems
6.6 Basic macroeconomic Issues
6.6.1 Business Cycle
6.6.2 Unemployment
6.6..3 Inflation
6.6.4 Trade deficit and budget deficit
6.7 Macroeconomic Policy Instruments
6.7.1 Monetary policy
6.7.2 Fiscal policy
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Textbook: - Campbell R. McConnel, Economic Principles, Problems and Policies
References
1. Dominic Salvatore and Eugene A. Diulio, Principles of Economics.
2. Williams Baumol, Principles of Economics, 9th Edition
3. Dwivedi, D.N. (2004), Microeconomics: Theory and Applications
4. Landsburg, Steven E. (1999), Price Theory and Applications, 4th edition, Cincinnati, Ohio: South
Western College Publishing Company.
5. Mansfield, Edwin (1997), Microeconomics: Theory and Applications, 9th edition, New York:
W.W. Norton and Co., Inc.
6. Browning, Edgar, and Mark A. Zupan (1999), Microeconomic Theory and Applications, 6th
edition.
Modality of Evaluation
Assignments …………………… …20%
Quizes………………………………5%
Test…………………………… ….25%
Final Examination ……………….. 50%
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